Below is a comprehensive discussion of the topic “Illegal Retaliation and Due Process in Employee Performance Evaluations” in the context of Philippine labor law. This overview covers the legal framework, relevant principles, key jurisprudence, best practices, and potential remedies available to aggrieved employees under Philippine law.

1. Introduction

Employee performance evaluations are a crucial aspect of human resource management. They help determine merit increases, promotions, and identify areas of improvement. However, these evaluations can become contentious if used as a means to retaliate against employees for engaging in protected activities or for asserting their rights under Philippine labor laws. In such instances, the employee may raise claims of illegal retaliation or “reprisal,” which can lead to legal disputes.

At the same time, employers in the Philippines must ensure that any adverse personnel action—especially one based on an employee’s performance—observes due process. Failure to comply with due process requirements can expose an employer to potential liability for illegal dismissal, even if the underlying reasons appear justifiable.

This article explores the legal framework, principles, and practical considerations related to illegal retaliation and due process in employee performance evaluations in the Philippines.

2. Legal Framework

2.1. Philippine Constitution

Right to Security of Tenure
The 1987 Philippine Constitution enshrines the right of employees to security of tenure (Article XIII, Section 3). This principle is central to the notion that an employee can only be dismissed for just or authorized causes and after observance of due process.
Policy on Social Justice and Protection of Labor
The Constitution also underscores the State policy to protect labor and promote social justice (Article II, Section 18 and Article XIII, Section 3). This broader policy basis informs all employment-related legislation, administrative issuances, and court decisions.

2.2. Labor Code of the Philippines (Presidential Decree No. 442, as amended)

Just and Authorized Causes (Articles 297–298)
Under the Labor Code, an employee may be validly dismissed only for just or authorized causes. Performance-related grounds typically fall under “just causes,” particularly “Gross and Habitual Neglect of Duties” or “Willful Disobedience of the lawful orders of the employer,” if the performance issue is severe.
Security of Tenure (Article 294)
Reinforcing the constitutional guarantee, the Labor Code provides that “no employee shall be dismissed except for a just or authorized cause and only after due process.”
Anti-Retaliatory Measures
While the Labor Code does not use the specific term “retaliation,” it contains provisions that protect employees from adverse action due to union activities, filing labor complaints, or reporting labor law violations. These can be read together with jurisprudence that prohibits any form of reprisal or discrimination for an employee’s lawful exercise of rights.

2.3. Omnibus Rules Implementing the Labor Code and DOLE Issuances

Procedural Requirements
Department of Labor and Employment (DOLE) issuances, such as Department Order No. 147-15 (Series of 2015), clarify and reiterate the procedural due process requirements for dismissals. They specify the so-called “two-notice rule” and the need to give employees a chance to respond to allegations.
General Guidelines
DOLE encourages employers to adopt clear guidelines on employee discipline and performance management. When a performance evaluation is the basis for a personnel action, there must be objective criteria, proper documentation, and fair procedures.

2.4. Jurisprudence and Case Law

Philippine Supreme Court decisions have consistently held that:

Retaliation claims are recognized if an employee can show that the employer punished them (e.g., low performance ratings, demotions, suspensions, or termination) because they exercised their labor rights (e.g., filing a grievance, supporting a union, whistleblowing, refusing to engage in illegal acts).
Due process must be strictly observed for any dismissal or adverse action, including those based on performance evaluations. Failure to follow due process requirements can result in liability, even if the employer has a valid cause.

3. Illegal Retaliation: Concepts and Illustrations

3.1. Definition

Illegal retaliation refers to an adverse action taken against an employee for engaging in a legally protected activity. In the context of the Philippines, this often arises in scenarios such as:

Union activities – If an employer gives consistently poor performance evaluations or threatens dismissal to discourage union membership or participation, it may be considered unfair labor practice.
Whistleblowing or complaints – Employees who report labor law violations or file complaints in government agencies (e.g., DOLE, NLRC) cannot be subjected to punitive actions disguised as performance-based evaluations.
Exercise of statutory rights – Employees who have availed themselves of benefits or entitlements (e.g., leave benefits, SSS, PhilHealth claims) and thereafter receive a suspiciously low performance rating or denial of promotion may raise allegations of retaliation.

3.2. Essential Elements of Retaliation

Although each case is unique, an employee typically needs to show:

Protected Activity – The employee took part in an activity protected by law (e.g., filed a labor complaint, joined a labor organization, reported a violation to DOLE, etc.).
Adverse Action – The employer took an adverse action (e.g., demotion, dismissal, or unwarranted poor evaluation) after or close in time to the protected activity.
Causal Connection – There is a link between the protected activity and the adverse action, such that the adverse action appears to be a direct consequence of the employee’s exercise of their right.

3.3. Examples

Selective Discipline – An employee who reported unpaid wages to DOLE suddenly receives a series of poor performance marks, despite having no history of performance issues.
Constructive Dismissal – An employee may be subjected to humiliating tasks or stripped of responsibilities under the guise of “performance improvement,” pushing the employee to resign.
Refusal to Approve Lawful Benefits – Management denies rightful pay raises or incentives, citing “performance issues,” in direct retaliation against an employee for raising workplace concerns.

4. Due Process in Employee Performance Evaluations

4.1. Substantive Due Process

Substantive due process in the employment setting involves ensuring that there is a valid, lawful, and reasonable cause for adverse actions. In performance evaluations, the employer’s criteria must be:

Objective and measurable – Clear metrics that are job-related and consistently applied.
Job-related – Metrics must relate meaningfully to the employee’s actual responsibilities.
Communicated in advance – Employees should be aware of performance standards and the consequences of failing to meet them.

If an employee’s performance is used as a basis for disciplinary action or dismissal, there must be credible evidence showing:

The employee was duly informed of the performance expectations.
The employee failed to meet these expectations over a reasonable period.
Corrective measures (e.g., coaching, training, performance improvement plan) were given, if appropriate.

4.2. Procedural Due Process

The Supreme Court has repeatedly emphasized the importance of procedural due process in dismissal and disciplinary actions. This is encapsulated in the “two-notice rule”:

First Notice (Show-Cause Notice or Notice to Explain)
- Informs the employee of the specific acts or omissions for which dismissal or penalty is sought.
- Gives the employee an opportunity to submit a written explanation or defense.
Hearing or Conference (Optional but Encouraged)
- Employers should give the employee a chance to respond and present evidence in a conference or hearing.
- This step, though not always mandatory in the strict sense, is highly recommended to preempt claims of denial of due process.
Second Notice (Notice of Decision)
- Informs the employee of the employer’s decision (e.g., whether the penalty is dismissal, demotion, or suspension).
- States the basis of the decision, referencing findings from the first notice and any subsequent proceedings.

Failure to observe these processes can lead to a finding of illegal dismissal, even if the employer had just cause.

5. Intersection of Illegal Retaliation and Due Process in Performance Evaluations

5.1. The “Pretextual” Evaluation

A “pretextual” evaluation is one that pretends to measure performance but is actually intended to punish or retaliate. The employee may challenge such evaluation by:

Demonstrating inconsistencies between actual performance and the rating received (e.g., prior positive performance reviews suddenly reversed without basis).
Showing a suspicious timeline linking the protected activity (e.g., labor complaint) to the changed performance rating.
Presenting evidence that other employees who performed similarly (or worse) were not given the same rating.

5.2. Employer Best Practices

To avoid allegations of retaliation:

Adopt Clear and Objective Performance Standards – Communicate and implement written criteria that can be uniformly measured.
Document Employee Performance – Maintain records of accomplishments, areas needing improvement, feedback provided, and steps taken for performance improvement.
Provide a Grievance Mechanism – Give employees an avenue to question or contest ratings. An internal appeal process can mitigate claims that the rating is retaliatory.
Separate the Evaluation from Labor Disputes – If an employee has an ongoing labor complaint, ensure that any performance evaluation process is transparent, well-documented, and fairly conducted.

6. Remedies for Affected Employees

Employees who believe they have been subject to illegal retaliation or denied due process in their performance evaluations have various remedies, depending on the severity of the employer’s action:

Filing a Complaint at DOLE or NLRC
- Employees may file a complaint for illegal dismissal, unfair labor practice, or illegal suspension, among others.
- The National Labor Relations Commission (NLRC) handles labor dispute resolution, including allegations of retaliatory actions.
Reinstatement and Back Wages
- If an employee is illegally dismissed, the NLRC or the courts may order reinstatement and payment of full back wages, plus other benefits.
Damages and Attorney’s Fees
- In cases of bad faith or fraud, employees can be awarded moral or exemplary damages, as well as attorney’s fees.
Constructive Dismissal Claims
- If the employee resigns due to intolerable conditions or severe retaliation, he/she may file a case for constructive dismissal and be entitled to the same remedies as in illegal dismissal cases.

7. Conclusion

In the Philippine labor context, performance evaluations carry significant weight in terms of promotions, pay increases, and disciplinary decisions. However, they must be grounded in objective, job-related criteria and be administered in line with the due process requirements mandated by law. Employers who use performance evaluations as a vehicle for retaliation expose themselves to claims of illegal dismissal and unfair labor practice. On the other hand, employees who suspect that a negative performance evaluation is a pretext for retaliation should carefully document inconsistencies, timelines, and any relevant employer communications to support a potential claim.

By following transparent and equitable procedures for performance evaluations—and by safeguarding employees’ right to due process—employers can maintain a workplace environment that respects legal standards, fosters employee morale, and minimizes the risk of costly labor disputes. Conversely, employees can protect their own rights by understanding the interplay of illegal retaliation and due process, as well as the legal remedies available should they face retaliatory or procedurally flawed actions disguised as performance-related decisions.